Battle has been joined over the threat to Catholic adoption agencies, contained in a clause in proposed legislation to outlaw discrimination against homosexuals in publicly funded services.

The 12 adoption agencies in England and Wales have a total budget of nearly £100 million a year, and more than half of what they spend on adoption work comes from local authorities. The Catholic agencies have a high reputation and tend to concentrate on children with special needs, a valuable service to the public at large. All prefer married couples, some will consider cohabiting heterosexual couples and single people, but they all discriminate in the case of prospective adopters of the same sex. Then their policy - not always followed, it must be observed - is to "positively refer" applicants to other agencies.

The Government's task, of which it is making heavy weather, is to balance the good of outlawing discrimination against homosexuals against the bad of seeing these excellent Catholic agencies close down. And they really would close: the bishops are bound by teachings and policies that are not theirs to change (and certainly will not be changed by this legislation). But most of what both sides want can be achieved by compromise. Gay couples will find plenty of agencies to welcome them, and the Catholic societies can continue with their good work in accordance with their consciences. So the battle boils down to the argument that to allow one exception, even on grounds of religious conviction, would undermine the new law as a whole. That is stretching the argument too far.

It is unwise for issues involving a genuine conflict of rights to be pushed to the point where there is total victory for one side and defeat for the other. But it would be well for the Catholic Church to recognise why its own position has become difficult to explain and defend. Its submission to Government makes reference to Catholic sexual ethics. Not long ago the Vatican published an ill-judged document that described the legal recognition of homosexual relationships as "the legislation of evil". The Catholic Catechism says that Scripture describes homosexual acts as "grave depravity". This is far removed from the temper of the times, and probably no longer even reflects what a majority of practising Catholics believe about homosexuals. Many of them have gay friends and gay relatives; Catholic mothers have gay sons. Some of the most devout are gay themselves.

Even the Church's own statements in connection with the current controversy, such as Cardinal Murphy-O'Connor's letter to Cabinet ministers this week, are wary of using the intemperate language of Rome. Indeed, if all homosexual acts are depraved, then helping homosexual couples to apply to other agencies would be colluding in their sin. The implication is that the cardinal does not believe in this argument. His own argument is based not on "depravity" but on the preference for children to have a father and a mother.

There is a discernible thaw in the relationship between Catholicism and homosexuality in most of the Western world, but it is impossible to say how far or fast this melting of the ice will go. The higher up the hierarchical ladder of the Church one goes, the less responsive it is to movements in grass roots opinion. But the Catholic Church in England and Wales has certainly made progress. It should be encouraged to make more.

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